September Commercial Chapter 11 Filings Up 78 Percent over Last Year; Total Filings Decrease 35 Percent

September Commercial Chapter 11 Filings Up 78 Percent over Last Year; Total Filings Decrease 35 Percent

Commercial chapter 11 filings totaled 747 in September, a 78 percent increase over September 2019’s total of 420 filings, according to data provided by Epiq. However, overall September 2020 business filings were 2,677, a decrease of 16 percent compared to the 3,190 business filings in September 2019. Total U.S. filings registered 39,701 in September 2020, down 35 percent from last September’s total of 61,156. The 37,024 consumer filings in September represented a 36 percent decrease from the September 2019 consumer total of 57,966.

"Families and businesses are faced with growing financial challenges because of the economic uncertainty due to the COVID-19 pandemic and mounting debt loads," said ABI Executive Director Amy Quackenboss. “While fluctuating market conditions and high filing costs continue to be a challenge for struggling consumers and companies seeking the financial fresh start of bankruptcy, the expiration of government stabilization programs, high unemployment and a precarious financial outlook for many sectors will likely lead to a dramatic climb in filings in early 2021.”

Commercial chapter 11 filings increased 33 percent during the first nine months of 2020 (Jan. 1-Sept. 30) from the same period a year ago, as the 5,529 filings surpassed the 4,148 filings in 2019. Total U.S. bankruptcy filings decreased 28 percent during the first nine months of the year, as the 420,048 filings dropped from the 580,625 filings in 2019. The 394,618 total noncommercial filings through the first three quarters of 2020 also represented a 28 percent decrease from the noncommercial filing total of 551,082 through the first three quarters of 2019. Commercial bankruptcy filings during the first nine months of the year decreased 14 percent to 25,430 from the 29,543 filings during the same period in 2019.

The average nationwide per capita bankruptcy filing rate for the first nine calendar months of 2020 (Jan. 1-Sept. 30) decreased slightly to 1.81 (total filings per 1,000 population) from the 1.84 rate for the first eight months of the year. The average daily filing total in September 2020 was 1,891, a 25 percent decrease from the 2,527 total daily filings registered in September 2019. States with the highest per capita filing rates (total filings per 1,000 population) through the first nine months of 2020 were:

1. Alabama (4.05)

2. Delaware (3.68)

3. Tennessee (3.59)

4. Mississippi (3.09)

5. Nevada (2.96)

ABI is one of 16 leading organizations taking part in the Insolvency 2020 Virtual Summit through the end of October, which has gathered numerous experts to provide their perspectives on current insolvency and restructuring trends during the COVID-19 pandemic and the future of corporate reorganization. Sessions taking place this week include a look at restructuring an industry that has been shut down, how commercial real estate will be the next big wave of chapter 11s, and M&A strategies during the pandemic. If you would like to be registered for a press pass to attend the Insolvency 2020 Virtual Summit, please contact ABI Public Affairs Officer John Hartgen at 703-894-5935 or [email protected]

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ABI is the largest multi-disciplinary, nonpartisan organization dedicated to research and education on matters related to insolvency. ABI was founded in 1982 to provide Congress and the public with unbiased analysis of bankruptcy issues. The ABI membership includes nearly 11,000 attorneys, accountants, bankers, judges, professors, lenders, turnaround specialists and other bankruptcy professionals, providing a forum for the exchange of ideas and information. For additional information on ABI, visit www.abi.org. For additional conference information, visit http://www.abi.org/calendar-of-events.

Epiq, a global leader in the legal services industry, takes on large-scale, increasingly complex tasks for corporate counsel, law firms, and business professionals with efficiency, clarity, and confidence. Clients rely on Epiq to streamline the administration of business operations, class action and mass tort, court reporting, eDiscovery, regulatory, compliance, restructuring, and bankruptcy matters. Epiq subject-matter experts and technologies create efficiency through expertise and deliver confidence to high-performing clients around the world. Learn more at https://www.epiqglobal.com.